Which of the following is key for the Coase Theorem to reach an optimal solution to an externality?
A. Clearly defined property rights
B. Both parties having property rights
C. No property rights
D. A single party with property rights
Answer: A
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A plastics factory emits water pollutants into a nearby river. The marginal private cost of producing plastics and the marginal external cost of the pollutants are both constant with respect to the quantity of plastics produced
If the demand for plastics is downward sloping, what happens to the socially optimal level of output and market price if the demand curve for plastics shifts rightward? A) Optimal price and quantity increase B) Optimal price increases, optimal quantity remains unchanged C) Optimal price remains unchanged, optimal quantity increases D) Optimal price and quantity remain unchanged
Refer to the above table. There is an excess quantity supplied of 2,000 units at a price of
A) $450. B) $500. C) $600. D) $700.
Suppose an economy is initially in equilibrium and there is a sudden increase in oil prices. Which of the following is the most likely result?
a. Growth in real GDP b. Price stability c. Full employment output d. Stagflation e. Deflation
Which is an illustration of a microeconomic question?
a. What is the current national rate of unemployment? b. Is the production of goods and services in the economy greater this year than last year? c. Is the economy experiencing a decline in the rate of inflation? d. Will a new type of television set increase the number of buyers?